Which of the Following Statements Is True

question 17

Multiple Choice

Which of the following statements is true?

• A) The method used in regression analysis for incorporating a categorical variable into the model is by organizing the categorical variable into one or more indicator variables.
• B) An indicator variable is a dependent variable whose value is set at either zero or one.
• C) There are four possible responses listed for marital status. Based on this, four indicator variables will need to be created and incorporated into the regression model.
• D) On a survey there is a question that asks whether someone lives in a house, apartment, or condominium. These three responses could be coded in an indicator variable using values of 0, 1, and 2.
• E) All of the above are correct.

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Definitions:

R-squared

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.

Dependent Variable

A variable that responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation Y = a + bX.

Independent Variable

A variable in an experiment that is manipulated to observe its effect on the dependent variable.

Variable Manufacturing Cost

Direct costs associated with manufacturing, changing with the level of output, including direct materials, direct labor, and variable manufacturing overhead.